TEMAS DE ECONOMIA E GESTÃO

29 de julho de 2016

How many times have you walked out of a theoretically important meeting—a leadership offsite, a C-suite pow-wow, a sit-down with the board—thinking, That was a great discussion, but I’m not sure we really accomplished anything? More often than not, the problem lies not in what did or didn’t happen at the meeting itself. You didn’t get anything done because the goals for the meeting were never firmly established in the first place.

We see this happen all the time when clients hire us to help manage offsites. Often, they start by handing us a pretty well developed (and usually packed) agenda, full of already-booked speakers, and a finalized list of confirmed attendees. Beyond logistics, the actual substance of the offsite is nearly set. But then we always ask the meeting owner—the most senior executive hosting it—the same two questions:What do you want to have debated, decided, or discovered at the end of this session that you and the team haven’t already debated, decided, or discovered?What do you want attendees to say when their team members ask, “What happened at the big meeting?”

In almost every case, the response is the same: “That’s a good question—I hadn’t actually thought about those things.”

It doesn’t matter if it’s an eight-person board meeting, a 15-person executive team meeting, or a 150-person leadership conference—your first step when planning an important one-off or non-routine get-together should be to draft an initial set of goals based on the answers to the two questions above. In the words of Stephen Covey, “Begin with the end in mind.” These objectives are not the activities you will be engaged in or the time slots on the agenda. They are more high level: your desired outcomes for the offsite.

The list needn’t be very long or complicated. As a starting point, three-to-five short bullets or sentences that articulate what you want to accomplish is more than enough.

But this process may take some time. The meeting owner might go through two to three iterations before he or she has a straw-model set of objectives ready to be tested with other key meeting stakeholders, who should then be asked to review the list and identify any missing or unnecessary goals. Once everyone is aligned, agree and communicate to all other attendees that these objectives are locked in. This helps keep the agenda focused and gives the meeting owner cover if someone asks to add an unrelated presentation or discussion at the last minute.

Here are some example objectives from different types of meetings we’ve run recently:

Board meeting:Provide Board input as Management formulates the new five-year strategyAgree on how much runway remains on the current core strategyIdentify new strategies to potentially pursue

Finalize the operating model for strategic governanceAnnual strategic planning processLong-term (five+ year) strategic oversightAgree on the topics and timing for additional Board input into the current planning cycleExecutive team meeting: Develop a list of growth opportunities for the team to further assessBegin to define select growth opportunities, including the future state description for each and potential measures of successConfirm the accountable executive and team leader for each opportunityUnderstand the timeline and activities over the next three months

Leadership conference:Establish the purpose and positioning of the Extended Leadership TeamImpart a meaningful understanding of the company’s vision, mission, and strategy, including top priorities for the next three yearsUnderstand priority issues surfaced by attendees and develop potential solutionsAlign around next steps

Your list of objectives must also drive important decisions about aspects of the meeting:

Agenda. Draft an agenda and map each activity to your stated goals. Do all of them help you achieve one or more of your objectives? Are there any objectives that can’t be achieved through what you have planned?

Attendees. The number and identity of attendees should be based on the scope and objectives of the meeting. For example, if you need to make decisions, we recommend a smaller group. If your aim is to generate ideas or achieve broad organizational buy-in for an initiative, you should invite a larger group.Pre-reads. Don’t overload people with voluminous meeting pre-reads full of assorted plans, reports and studies that aren’t directly related to your objectives. Instead use your list to organize, filter and focus the content you send in advance.

Location. The location of your meeting should reflect its objectives too. For example, if your goals focus on a specific region, go there. If an explicit objective is for participants to get to know each other better, make sure you pick a venue designed for socializing.

When you set out and share your objectives in this way, it ensures that everyone is “coming to the same meeting.” Attendees will be energized and ready to accomplish those goals.

26 de julho de 2016

German Chancellor Angela Merkel gave her opposite number Theresa May breathing space to come up with a Brexit negotiation position on Wednesday (20 July), concurring with the new British PM that London will not trigger Article 50 until the New Year.

At a evening dinner in Berlin – May’s first foreign trip since becoming prime minister seven days ago – May stressed that she needed until the end of the year to come up with a UK position – even if that upset some EU member states.

Merkel, at a joint press conference of the two women at the Chancellery in Berlin, agreed, but warned “No one wants things to be up in the air – neither Britain nor the member states of the EU.”

Technically, the UK must give legal notice under Article 50 of the Lisbon Treaty of its desir

By Matthew Tempest | EurActiv.com

German Chancellor Angela Merkel gave her opposite number Theresa May breathing space to come up with a Brexit negotiation position on Wednesday (20 July), concurring with the new British PM that London will not trigger Article 50 until the New Year.

At a evening dinner in Berlin – May’s first foreign trip since becoming prime minister seven days ago – May stressed that she needed until the end of the year to come up with a UK position – even if that upset some EU member states.

Merkel, at a joint press conference of the two women at the Chancellery in Berlin, agreed, but warned “No one wants things to be up in the air – neither Britain nor the member states of the EU.”

Technically, the UK must give legal notice under Article 50 of the Lisbon Treaty of its desire to quit the 28-member bloc, following June’s shock referendum result.

However, Article 50 makes no mention of a time frame, beyond the two-years of negotiation that will then follow.

Although May became PM unexpectedly quickly, following David Cameron’s resignation, few member states are likely to have much patience beyond the start of 2017 – and with it, the French and German election cycles.

“Everybody has an interest that these things are prepared carefully, that the positions are clear – and I think it’s fully understandable that a certain amount of time is needed for that,” Merkel said.

With a UK parliament report today condemning the Cameron government for having no Brexit contingency planning, Merkel told reporters that Britain needed a “well-defined position” before starting the two-year talks

May admitted such a timescale pushing notification beyond the end of 2016 “would not please everyone.”

She said, “All of us will need time to prepare for these negotiations and the United Kingdom will not invoke Article 50 until our objectives are clear. That is why I have said already that this will not happen before the end of this year.

“I understand this timescale will not please everyone but I think it is important to provide clarity on that now. We should strive for a solution which respects the decision of British voters, but also respects the interests of our European partners.”

May said her priority was a “sensible and orderly departure.”

Although May – who herself campaigned for a Remain vote in the referendum – has repeatedly said ‘Brexit means Brexit’ since entering Number 10, it has become clear that few on the Leave side agree what form of relationship, or membership of the European Economic Area, could now apply.

No praise for Boris

Under critical questioning from German reporters over the appointment of Boris Johnson as Foreign Secretary, May pointedly refused to defend him by name, merely praising “the team” she had appointed to deal with Brexit.

Merkel also pointed out that ‘informal’ negotiations on Brexit could not take place until Article 50 is notified.

MAY WARNS AGAINST SCOTTISH EU HOPES AHEAD OF MERKEL TALKS

Theresa May warned on Wednesday (20 July) that Scottish plans to somehow remain in the EU despite the UK’s Leave vote were “impracticable”.

21 de julho de 2016

If you’re a hiring manager, you’re probably happiest getting a sense of a candidate through unstructured interviews, which allow you to randomly explore details you think are interesting and relevant. (What does the applicant think of her past employer? Does she like Chicago? What does she do in her downtime?) After all, isn’t your job to get to know the candidate? But while unstructured interviews consistently receive the highest ratings for perceived effectiveness from hiring managers, dozens of studies have found them to be among the worst predictors of actual on-the-job performance — far less reliable than general mental ability tests, aptitude tests, or personality tests.

Why do we stick with a method that so clearly does not work, when decision aids, including tests, structured interviews, and a combination of mechanical predictors, substantially reduce error in predicting employee performance? The organizational psychologist Scott Highhouse called this resistance “the greatest failure of I-O [industrial and organizational] psychology.”

The unwillingness to give up a much-loved evaluation approach seems to be driven by two factors: Managers are overconfident about their own expertise and experience, and they dislike deferring to more structured approaches that might outsource human judgment to a machine.

When sociologist Lauren Rivera interviewed bankers, lawyers, and consultants, they reported that they commonly looked for someone like themselves in interviews. Replicating ourselves in hiring contributes to the prevalent gender segregation of jobs, with, for example, male bankers hiring more male bankers and female teachers hiring more female teachers.

Sometimes we have to learn the hard way. A few years ago, Texas legislators realized that the state was short on physicians. To fix the problem, the legislature required the University of Texas Medical School at Houston to increase the class size of entering students from 150 to 200 — after the admissions committee had already chosen its preferred 150 students. As most students apply to several medical schools simultaneously, by that time all the top-ranked candidates had already been spoken for. This meant that the pool of still-available students was made up of candidates who had previously received a low ranking from the admissions committee. Of the 50 students finally selected, only seven had received an offer from another medical school.

This government-dictated requirement turned into an eye-opening field study, allowing University of Texas researchers to examine whether the initial ranking mattered for the students’ performance in and after medical school. Here’s the shocking result: The performance of initially accepted and initially rejected students turned out to be the same. Digging deeper, the researchers found that about three-quarters of the difference in ratings between initially accepted and initially rejected students was due not to more-objective measures, such as grades, but rather to the interviewers’ perceptions of the candidates in unstructured interviews. Faced with this finding, the researchers ask whether, after an initial assessment of academic and other performance measures, traditional interviews should be replaced by a lottery among the viable applicants.

I don’t expect lotteries to replace interviews in most situations, but the evidence against unstructured interviews should make any hiring manager pause. These interviews should not be your evaluation tool of choice; they are fraught with bias and irrelevant information. Instead, managers should invest in tools that have been shown to predict future performance. On the top of your list should be work-sample tests related to the tasks the job candidate will have to perform. For example, Compose, a cloud storage company, decided to completely do away with resumes and instead evaluate job candidates based on how well they solved a job-related problem. Companies including Applied, Blendoor, Edge, GapJumpers, Interviewing.io, Paradigm, and Unitive provide the analytical tools and the software that can bring more structure to hiring procedures.

Still, most companies will want to “see” the candidates after the work-sample test. Companies should rely on a structured interview that standardizes the process among candidates, eliminating much subjectivity. These interviews pose the same set of questions in the same order to all candidates, allowing clearer comparisons between them. This may seem like an obvious approach, but, incredibly, it remains underused. Of course, the flow of conversation during the interview will be slightly more awkward than it already is, but the payoff is worth it.

The protocol should also require the interviewer to score each answer immediately after it is provided. This neutralizes a variety of biases: We are more likely to remember answers with vivid examples, for example, and answers that are most recent. Evaluators who wait until the end of the interview to rate answers risk forgetting an early or less-vivid but high-quality answer, or favoring candidates whose speaking style favors storytelling.

It’s also best to compare candidate responses horizontally. That is, if you interview five candidates, compare each of their answers on question one, then each answer on question two, and so on. Many academics, myself included, do this when grading exams. Ideally, evaluators hide their assessment of question one from themselves — literally obscuring it from view — to reduce the chance that the answer will influence scores on subsequent questions. This can be uncomfortable because interviewers often discover that a candidate gives superb answers to some questions but deeply disappointing ones to others. Although it complicates evaluation, identifying this internal inconsistency is worthwhile, especially if there are questions that receive more weight.

Comparative evaluations not only help us calibrate across candidates but also decrease the reflex to rely on stereotypes to guide our impressions. In joint research with Max Bazerman of Harvard Business School and Alexandra van Geen of Erasmus University Rotterdam, we have shown that biases that lead us to expect women to be better at stereotypically female jobs, such as nursing, and men at stereotypically male jobs, such as engineering, tend to kick in when we focus on and vertically evaluate one candidate at a time. In contrast, people are less likely to rely on whether a candidate “looks the part” when evaluating several candidates simultaneously and comparing them systematically.

Structured interviews are not just about discipline in asking questions — some companies, including Google, structure the content of their interviews using data. Their people-analytics departments crunch data to find out which interview questions are more highly correlated with on-the-job success. A candidate’s superb answer on such questions can give the evaluator a clue about their future performance, so it makes sense that responses to those questions receive additional weight.

Replacing unstructured with structured interviews is only part of the battle; managers should also abandon panel, or group, interviews altogether. I know of no evidence that they provide a superior gauge of a candidate’s future performance. And it’s best to keep interviewers as independent of each other as possible. To state the obvious, if you have four interviewers, four data points from four individual interviews trump one data point from one collective interview.

Once everyone has evaluated all candidates, the evaluators should submit their assessments before a meeting to discuss an applicant. This would allow an organization to aggregate answers — those one-to-10 weighted scores on questions asked in the exact same order. Assessments with candidates above a certain threshold should advance for further consideration. Whether the candidate roots for the Red Sox should not even be asked, and of course it’s not relevant.

Implementing these adjustments is just the beginning. Having embraced the fact that unstructured approaches are inferior, make sure you keep experimenting to fine-tune what works best in your context. For example, my colleagues and I are working with the government of a large country to improve its talent management. We have run a number of A/B tests to measure the diagnostic power of specific work-sample tests and interview questions for public servants. Data analysis and design innovations such as comparative evaluations can help organizations level the playing field and benefit from 100% of the talent pool.

Like people in most other human endeavors, hiring managers are powerfully and often unwittingly influenced by their biases. While it’s exceedingly difficult to remove bias from an individual, it’s possible to design organizations in ways that make it harder for biased minds to skew judgment. We should stop wasting resources trying to de-bias mindsets and instead start to de-bias our hiring procedures. Work-sample tests, structured interviews, and comparative evaluation are the smart and the right things to do, allowing us to hire the best talent instead of those who look the part. Smarter design of our hiring practices and procedures may not free our minds from our shortcomings, but it can make our biases powerless, breaking the link between biased beliefs and discriminatory — and often just stupid — actions.

Iris Bohnet is a behavioral economist and professor at the Harvard Kennedy School and director of its Women and Public Policy Program. Her new book, “What Works: Gender Equality by Design,” was published in March 2016 by Harvard University Press.

20 de julho de 2016

European Commissioner of Research, Science and Innovation Carlos Moedas during press conference at the European Commission headquarters in Brussels in April. PHOTO: EUROPEAN PRESSPHOTO AGENCY

Innovation in Europe is catching up with the U.S. and Japan, but the improvement in the bloc’s performance is only coming from a handful of its 28 members, the European Commission said Thursday.

Sweden remains the EU’s top innovator, while Latvia is the fastest growing one, according to figures from the 2016 European Innovation Scoreboard, the EU’s annual report on innovation across the bloc. Despite a slight decrease in its figures, Switzerland — which is not in the EU — is still the overall innovation leader in Europe.

The top performing EU members are already on a par with the U.S., Japan and South Korea, although these three countries retain their lead over the bloc. The EU is closing on the U.S. and Japan in terms of innovation performance, but South Korea continues to widen its competitive lead. China, still behind the EU in terms of innovation, has a performance growth rate five times that of the bloc.

“Leading countries and regions are supporting innovation across a wide range of policies from investment to education, from flexible labor conditions to ensuring public administrations that value entrepreneurship and innovation,” saidCarlos Moedas, the European commissioner for research, science and innovation.

But excellence in innovation is concentrated in just a few areas of Europe, with the most innovative regions typically found in the most innovative countries, highlighting the divergence in economic performance across the bloc.

All 36 of the EU’s regional innovation leaders are located in just seven EU countries: Denmark, Finland, France, Germany, the Netherlands, Sweden and the U.K.

The convergence observed since 2012 appears to have come to a halt too.

Since 2008 the innovation performances of 21 EU member states have increased but in the past year growth has only been seen in seven countries: Bulgaria, Denmark, France, Ireland, Malta and the U.K..

Latvia, the fastest growing country in terms of innovation, attained a 4% uptake in its performance in 2015. Romania, the worst-placed EU country, saw its performance drop by 4.4%.

The report pointed to appropriate investment, partnerships with academia and a strong research base as key drivers of innovation leadership in the best performing countries. The development of markets for innovative products was also highlighted as important.

Germany was singled out in the report as the top country for innovation, both for science-based research activities and investments in advanced equipment and machinery. Ireland was the leader in nurturing innovation in small and medium-sized companies, producing high numbers of innovative produces and jobs in fast-growing new companies.

“I want Europe to be a place where innovative SMEs and start-ups flourish and scale up within the single market,” said Elzbieta Bienkowska, the EU’s commissioner for the internal market and industry.

Ms. Bienkowska pointed to the need for a simplification of regulation on sales taxes, adapted insolvency rules, better access to information on regulatory requirements and work on a SME-friendly intellectual property framework.

The European Innovation Scoreboard compares research and innovation performance in EU countries as well as Iceland, Israel, Macedonia, Norway, Serbia, Switzerland, Turkey, and Ukraine. On a more limited number of performance indicators the report’s assessment also includes Australia, Brazil, Canada, China, India, Japan, Russia, South Africa, South Korea, and the U.S..

CALESTOUS JUMA

Calestous Juma, Professor of the Practice of International Development at Harvard’s Kennedy School of Government, is the author of Innovation and Its Enemies: Why People Resist New Technologies.

LONDON – The entire world felt the shock waves from the decision by voters in the United Kingdom to leave the European Union, and Africa was no exception, especially given its close historical ties with many EU member states. African pundits and public officials were quick to lament the new cloud of economic uncertainty and the potential for catastrophe in the near future.

Namibia has been alone in downplaying the Brexit fallout, most likely because its exports to the EU have declined significantly in recent years. But the rest of Africa is right to be taking it seriously, at least with respect to the short-term outlook.

However, from a long-term perspective, Africa should be optimistic. Most of the post-Brexit handwringing reflects traditional thinking that ignores the economic goals of both African countries and the UK. Dire warnings about Africa’s position as an exporter of raw materials to the UK and Europe assume that the full extent of cooperation between the two continents will forever be limited to commodities trading.

Africa aspires to much more than this. As Africa’s youthful population continues to come of age, it will push for more innovation and less reliance on commodity exports. In fact, Africa’sAgenda 2063 framework, adopted by the African Union in 2013, aims to establish the continent as a collection of “learning economies”: diversified, education- and innovation-driven, with a higher position in global production chains than extraction of raw materials.

In 2014, the AU adopted the Science, Technology, and Innovation Strategy for Africa (STISA) – a roadmap that calls for national and regional governing bodies to increase investment in research infrastructure, education, and other necessary conditions for technological innovation and entrepreneurship. Beyond those baseline investments, the plan also establishes a framework for engagement between Africa and its northern neighbors.

The STISA scheme places scientific cooperation above national politics. Though the Brexit vote is generally regarded as a symptom of rising nationalist sentiment in the UK, it doesn’t follow that the UK – or individual remaining EU member states, for that matter – will stop viewing science and technology as drivers of economic growth. In fact, scientists in the UK have already come together to demand that EU funding for research at British institutions not be compromised in any exit negotiation. Whatever the outcome, the possibilities remain strong for Africa to enter into future partnerships with the UK and the EU to advance its own innovation agenda.

In the future, national and supranational issues will, one hopes, matter less for innovation. But the new competition between EU member states and a non-member UK could lead to renewed investments in science and technology within those countries. This will take place in traditional innovation hubs – in cities with research universities, existing tech and science sectors, and few regulatory hurdles for entrepreneurs.

Like Silicon Valley, these hubs will become subnational ecosystems with a global presence. So, whether innovations come from the UK, the EU, or elsewhere, there will be opportunities in the international marketplace for African countries that have prepared for them.

This will require adjustments in Africa’s economic diplomacy. Rwanda, Ethiopia, and Kenya have already modified their foreign policies, particularly their placement and selection of ambassadors, to focus on global economic and trade issues.

Moreover, Africa’s position on the global economic stage will improve significantly when the Continental Free Trade Area negotiations conclude in 2017. The CFTA will comprise a market of more than a billion people with an initial GDP above $3 trillion. It will remove trade barriers and boost investment in infrastructure so that African countries have the industrial capacity to compete globally. All told, the CFTA is a grand opportunity for Africa to reshape its relations with the UK and the rest of the world.

Post-Brexit forecasts of doom and gloom for Africa’s export-driven economies miss a fundamental fact: these economies will soon be relying far less on commodity exports. When Africa’s potential for innovation and entrepreneurship is taken into account, a long-term perspective indicates a much brighter future.

15 de julho de 2016

JOSEPH E. STIGLITZ

Joseph E. Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences in 2001 and the John Bates Clark Medal in 1979, is University Professor at Columbia University, Co-Chair of the High-Level Expert Group on the Measurement of Economic Performance and Social Progress at the OECD.

NEW YORK – Digesting the full implications of the United Kingdom’s “Brexit” referendum will take Britain, Europe, and the world a long time. The most profound consequences will, of course, depend on the European Union’s response to the UK’s withdrawal. Most people initially assumed that the EU would not “cut off its nose to spite its face”: after all, an amicable divorce seems to be in everyone’s interest. But the divorce – as many do – could become messy.

The benefits of trade and economic integration between the UK and EU are mutual, and if the EU took seriously its belief that closer economic integration is better, its leaders would seek to ensure the closest ties possible under the circumstances. But Jean-Claude Juncker, the architect of Luxembourg’s massive corporate tax avoidance schemes and now President of the European Commission, is taking a hard line: “Out means out,” he says.

That kneejerk reaction is perhaps understandable, given that Juncker may be remembered as the person who presided over the EU’s initial stage of dissolution. He argues that, to deter other countries from leaving, the EU must be uncompromising, offering the UK little more than what it is guaranteed under World Trade Organization agreements.

In other words, Europe is not to be held together by its benefits, which far exceed the costs. Economic prosperity, the sense of solidarity, and the pride of being a European are not enough, according to Juncker. No, Europe is to be held together by threats, intimidation, and fear.

That position ignores a lesson seen in both the Brexit vote and America’s Republican Party primary: large portions of the population have not been doing well. The neoliberal agenda of the last four decades may have been good for the top 1%, but not for the rest. I had long predicted that this stagnation would eventually have political consequences. That day is now upon us.

On both sides of the Atlantic, citizens are seizing upon trade agreements as a source of their woes. While this is an over-simplification, it is understandable. Today’s trade agreements are negotiated in secret, with corporate interests well represented, but ordinary citizens or workers completely shut out. Not surprisingly, the results have been one-sided: workers’ bargaining position has been weakened further, compounding the effects of legislation undermining unions and employees’ rights.

While trade agreements played a role in creating this inequality, much else contributed to tilting the political balance toward capital. Intellectual property rules, for example, have increased pharmaceutical companies’ power to raise prices. But any increase in corporations’ market power is de facto a lowering of real wages – an increase in the inequality that has become a hallmark of most advanced countries today.

Across many sectors, industrial concentration is increasing – and so is market power. The effects of stagnant and declining real wages have combined with those of austerity, threatening cutbacks in public services upon which so many middle- and low-income workers depend.

The resulting economic uncertainty for workers, when combined with migration, created a toxic brew. Many refugees are victims of war and oppression to which the West contributed. Providing help is a moral responsibility of all, but especially of the ex-colonial powers.

And yet, while many might deny it, an increase in the supply of low-skill labor leads – so long as there are normal downward-sloping demand curves – to lower equilibrium wages. And when wages can’t or won’t be lowered, unemployment increases. This is of most concern in countries where economic mismanagement has already led to a high level of overall unemployment. Europe, especially the eurozone, has been badly mismanaged in recent decades, to the point that its average unemployment is in double digits.

Free migration within Europe means that countries that have done a better job at reducing unemployment will predictably end up with more than their fair share of refugees. Workers in these countries bear the cost in depressed wages and higher unemployment, while employers benefit from cheaper labor. The burden of refugees, no surprise, falls on those least able to bear it.

Of course, there is much talk about the net benefits of inward migration. For a country providing a low level of guaranteed benefits – social protection, education, health care, and so forth – to all citizens, that may be the case. But for countries that provide a decent social safety net, the opposite is true.

The result of all this downward pressure on wages and cutbacks in public services has been the evisceration of the middle class, with similar consequences on both sides of the Atlantic. Middle- and working-class households haven’t received the benefits of economic growth. They understand that banks had caused the 2008 crisis; but then they saw billions going to save the banks, and trivial amounts to save their homes and jobs. With median real (inflation-adjusted) income for a full-time male worker in the US lower than it was four decades ago, an angry electorate should come as no surprise.

Politicians who promised change, moreover, didn’t deliver what was expected. Ordinary citizens knew that the system was unfair, but they came to see it as even more rigged than they had imagined, losing what little trust they had left in establishment politicians’ capacity or will to correct it. That, too, is understandable: the new politicians shared the outlook of those who had promised that globalization would benefit all.

But voting in anger does not solve problems, and it may bring about a political and economic situation that is even worse. The same is true of responding to a vote in anger.

Letting bygones be bygones is a basic principle in economics. On both sides of the English Channel, politics should now be directed at understanding how, in a democracy, the political establishment could have done so little to address the concerns of so many citizens. Every EU government must now regard improving ordinary citizens’ wellbeing as its primary goal. More neoliberal ideology won’t help. And we should stop confusing ends with means: for example, free trade, if well managed, might bring greater shared prosperity; but if it is not well managed, it will lower the living standards of many – possibly a majority – of citizens.

There are alternatives to the current neoliberal arrangements that can create shared prosperity, just as there are alternatives – like US President Barack Obama’s proposed Transatlantic Trade and Investment Partnership deal with the EU – that would cause much more harm. The challenge today is to learn from the past, in order to embrace the former and avert the latter.

E.U. Countries Tighten Rules to Counter Tax Avoidance

By REUTERSJUNE 21, 2016

An Amazon warehouse in Brieselang, Germany. The European Union wants to collect more taxes from multinational businesses.

Credit

Sean Gallup/Getty Images

BRUSSELS — Multinational corporations may find it harder to escape taxation after European Union states tightened rules on Tuesday to counter tax avoidance.Public anger has grown since news articles revealed how companies such as Amazon and Starbucks have used legal means to vastly reduce their tax bills and since the Panama Papers and the so-called Luxleaks scandals exposed the extent of problem.

“Today’s agreement strikes a serious blow against those engaged in corporate tax avoidance,” said Pierre Moscovici, the European commissioner in charge of tax issues.

The measures include powers for governments to tax profits shifted by companies based in the European Union to low-tax countries where they have no real business activity, and to tax assets developed in the European Union and then transferred outside the bloc, a trick often used to avoid taxes on intellectual property patents.

The measures will turn nonbinding international standards into binding rules and go beyond what has been agreed to by the Organization for Economic Cooperation and Development.

But the compromise — which had to be agreed to unanimously by the 28 European Union states — was reached after some of the most contentious provisions were scrapped or delayed, raising doubts about the effectiveness of the new measures.

The humanitarian organization Oxfam, which says tax avoidance exacerbates global poverty, called the watered-down rules “wastepaper” and said that the European Union had missed an opportunity to fight the problem.“It is outrageous that governments have been unable to agree on an effective approach against parking profits in tax havens while repeated tax scandals are calling for immediate and efficient action,” Oxfam said.Several smaller European Union countries that have tax policies intended to attract multinationals had feared that companies could leave if the rules were too severe.

To quell concerns, a proposal known as a switch-over clause was dropped. It would have taxed dividends and capital gains that European firms pay to companies they control in low-tax or tax-free countries to avoid taxation.National governments were also granted leeway on how to apply new measures to reduce deductions on interest payments. States, under certain conditions, will be able to keep their own rules in place until 2024, rather than the 2019 deadline originally proposed.

After Brexit Vote, a Choice for Europe: Move Forward, or Fall Back

Is “Europe” finished?

The latest polls and political prediction markets this week suggest that Britons will vote on Thursday to stay in the European Union. The Leave campaign, led by Boris Johnson, the former mayor of London who tried to whip up a surge of resentment against immigrants into a vote for Britain to leave the bloc, looks set to fail.

But even if the pro-European Remain cause pulls out a victory, the popular hostility against the decades-long process of European integration — evident not only in Britain but across the Continent — underscores a defining weakness. Europe itself lacks a firm democratic foundation.

Europe’s leaders face a clear-cut choice: For their integration agenda to succeed — preserving the free movement of people within the bloc, forging ahead with the euro and the single market, keeping doors open to outsiders — the E.U. must figure out how to overcome the narrow national interests and mistrust that tie it up in knots every time a collective response is needed.

That will require democracy on a European scale. If Europe’s national governments remain unwilling to cede political power to regional institutions that have democratic legitimacy, the European Union will slide backward.

“We need pan-E.U. politics,” argued Mary Kaldor, professor of global governance at the London School of Economics. “I don’t know how we get there.”

For all the complaints about the Brussels fudge factory, the discontent in Britain on Thursday probably will have little to do directly with Europe’s institutional shortcomings. “This is about frustration of the working class about a long period of deindustrialization,” Professor Kaldor said. Mr. Johnson is Britain’s Donald Trump. Europe is a stand-in for globalization.

Graphic | What Is Driving the ‘Brexit’ Debate, and What a ‘Leave’ Vote Could Mean British citizens will vote on whether their country should remain a member of the European Union. While a vote to leave would give Britain more autonomy, it could also create great economic uncertainty.

“Popular discontent with globalization in its many forms has been building up in the West for many years now,” said Kevin O’Rourke, an economic historian at the University of Oxford. “We are seeing its effects everywhere.”

Still, the European Union’s hapless response to its current social and economic challenges has made it an easy target. With no real European institutions of democratic accountability — the European Parliament serves little more than a decorative function — the only way voters can express their dissatisfaction is by pushing to leave and by supporting extremist political movements.

“In many countries the perception is that national governments are powerless and that there is nothing at the European level to address problems,” said Paul De Grauwe, a former Belgian member of Parliament now at the London School of Economics. “Both Europe and national governments lose legitimacy.”

What could the E.U. have done better? Things would be a lot easier if most of Europe were growing at more than a snail’s pace. The inability of countries in the euro area — which does not include Britain — to stop the slow-motion implosion of Greece and other deeply indebted countries gives integration a bad name. The two are related.

Germany’s resistance to share in the costs of a collective solution to seriously write down the debts that Greece and other Southern European nations will never be able to pay off — insisting instead that the indebted countries and their beleaguered citizens bear nearly all the cost — has prolonged and deepened Europe’s stagnation.

“Britons contemplate the crisis of the euro as a little bit of proof that they were right not to join,” said Giancarlo Corsetti, a professor of macroeconomics at the University of Cambridge.

Britons have more control over immigration than the Leave campaign would have them believe. Refugee policies are decided in London. And it was the Labour government of Tony Blair that chose not to take advantage of a seven-year phase-in period to limit the entry of citizens of new members from Eastern Europe. Many of the Polish plumbers that so inflamed the British populace showed up because Britain — unlike, say, Germany — chose to let them in straight away.

Immigration, however, can easily be deployed as an argument to leave the rest of Europe. More than half the 333,000 immigrants who arrived in Britain last year were E.U. citizens, free to be there as a matter of right under European law.

“The Leave campaign made an argument that the only way to reduce this part of immigration is to leave the E.U.,” noted Jacob Funk Kirkegaard, an expert on immigration at the Peterson Institute for International Economics in Washington. “And they struck a chord with the electorate.”

Dealing with hundreds of thousands of refugees fleeing war will never be easy. But Europe’s reaction was notoriously unproductive. The E.U.’s institutions again appeared irrelevant, as governments retrenched into their corners and failed to devise a collective, burden-sharing approach.

In May, a group of European scholars proposed a set of collective financing mechanisms to reduce debt burdens along the E.U.’s periphery and to pay for a European Union-wide refugee policy. Their report concluded: “The sovereign debt and refugee crises prove that Europe has failed to design institutions that are robust enough to weather difficult times.”

How much integration do Europeans need? Dani Rodrik at Harvard’s Kennedy School of Government notes that the E.U.’s initial major goal — preventing France and Germany from drawing the world into another war — has been achieved. It also served as a democratic, capitalistic anchor for Eastern European countries to hang onto after the collapse of the Soviet bloc.

Interactive Feature | ‘Brexit’: Explaining Britain’s Vote on European Union Membership Britain will hold a referendum on Thursday on whether to leave the European Union, a decision nicknamed “Brexit.”

But today Europe’s integration effort has lost sight of its political and social dimensions, he argues, narrowing into a raw effort to reduce market barriers. That’s not enough to inspire popular support.

There might be areas where collective action at the European level could make a difference — as a counterweight to colossal multinational companies that can challenge the authority of individual nations, or to prevent capital from effortlessly zipping across borders in an effort to avoid taxes. Indeed, the E.U. has taken a leading role confronting the world’s most daunting collective action problem: climate change.

An aging Europe is going to need more immigrants. Smart collective strategies would surely help the Continent deal with what are likely to be decades of intense migration from the many poor countries in its extended neighborhood.

The critical question is whether Europe will be able to achieve the kind of integrated decision-making needed to address these challenges. So far, it hasn’t shown it can rise to the occasion. “There is not much appetite for further political integration,” Mr. Corsetti said. Solutions to Europe’s challenges must navigate around this constraint.

The free movement of people inside the E.U. might be the first to go into reverse. “Restricting the free movement of labor is not a taboo,” Mr. Kirkegaard told me. “Another way freedom of movement will be restricted is you will see more and more restrictions placed on the ability of citizens from other E.U. countries to claim welfare benefits.”

Maybe the European Union’s future is more “à la carte” — a set of coalitions of the willing, as it were. Rather than insisting on all or nothing, said Richard Haass, president of the Council of Foreign Relations in New York, it might be better to consider “a Europe that is not one size fits all, where the balance between national governments and Brussels is more flexible.”

This may come as a disappointment to Europe’s current leaders. But one way or another, the project’s governance must come into line with what its people want. That’s called democracy.

“Europe must either roll back the economic integration or roll ahead the political integration,” Mr. Haass said, “so people feel they have a say over the politicians who are driving changes that affect their lives.”